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Intimidating the Competition

Penny auction intimidation, also known as power-bidding, is a tactic when is used and mis-used all the time. Bullies who partake in this strategy are often blamed for driving prices up and ruining the experienced for other bidders.

What is penny auction power bidding?

Power bidding is a penny auction bidding technique where the bidder intentionally bids extremely aggressively. Short-term power bidding is when the bidder bids immediately after any other bidder (without letting the clock run out). Long-term power bidding is when the bidder continue to bid on the same auction for extremely long periods of time. In either case, intimidators tend to use boatloads of bids to win auctions.

Why do bidders use this tactic?

Intimidators, aka power bidders, use this technique to let other bidders know that beating them is going to be costly and to build reputation. In the short-term, they try to convince most other bidders that competing is futile, hoping that they will quit and leave the auction. In the long term, power bidders try to build a reputation as people who you do not want to bid against which makes future auctions easier. On any penny auction website, power bidders gain a reputation and quitting early can tarnish their reputation so many are forced to take.

What are the effects of this type of bidding?

Power-bidding often drives auction prices up higher than they otherwise would go. This happens because there are usually a few power bidders at any one time so the back and forth can go on for hours and sometimes days. A common complaint on many penny auction websites is that power bidders are ‘taking over’. Good penny auction websites combat this by limiting the number of wins a person can have and thus, limiting the impact that power bidders can have on all ‘regular’ bidders.

How to Compete with Power Bidders

Power bidders can compete with power bidders and that’s about it. If there’s an obvious bully in the room, your only choice is to go all-in or to come back later and hope that they burnt out.

Beginners

For beginners, we recommend avoiding ‘pissing matches’ with power bidders because many accumulate many more bids and have done so at a lower cost. In short, beginners should stay-away from power bidders and should take part in ‘beginner’ auctions if the site offers them.

Experienced Bidders

If you’re more experienced and are aware of the bidding history of specific power bidders you’re up against, it’s possible to patiently watch the auction and jump-in only when others are clearly backing down. Only bid when the clock is very close to 0:00 and let other bidders carry most of the battle for you. This can take lots of time but it’s really the most efficient way to win auctions against power bidders.